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ADC 387 

Attachment 

ATTACHMENT TO ADC 387 

DLMS Enhancement: DLMS Supplement (DS) 846A Asset Reclassification Transaction and 

Associated Procedures, and Administrative Update to DS 947I Inventory Adjustment (Supply) 

1. ORIGINATOR: 

a. Service/Agency: Defense Logistics Management Standards Office (DLMSO) 

b.Originator: Ms. Mary Jane Johnson, e-mail: Mary.Jane.Johnson@dla.mil, (703) 767-0677; 

DSN 427. 

2. FUNCTIONAL AREA: Primary: Supply/ Logistics.

3. REFERENCES: 

a. DLMS Supplement 846A, Asset Reclassification, available at: http://www.dla.mil/j6/dlmso/elibrary/TransFormats/140_997.asp

b. DOD 4000.25-2-M, DLMS, Volume 2, available at: http://www.dla.mil/j6/dlmso/elibrary/manuals/dlms/v2.asp

c. Modernization of Defense Logistics System (MODELS) (now known as Defense Logistics 

Management System (DLMS)) Enhancement 89-077, subject: Provide a Means for Owners/Managers to 

Direct Storage Activities to Reclassify Materiel (see Enclosure 1) 

d. DLMSO memorandum, May 6, 2010, subject: PDC 376A, Revise DLMS 846A Asset 

Reclassification and 947I Inventory Adjustment to Support Navy BRAC SS&D/IMSP, with DLMS Data 

Mapping (Supply) [ADC 376 for PDC 376A is under development.] 

e. DLMSO memorandum, December 24, 2008, subject: Request for Implementation Date for 

Approved DLMS Change (ADC) 313, Revisions to DS 527R to Add Code for MILSTRAP DRB 

Functionality and to Address Enhancement for Advice Codes Used with 527R Receipt and Response to 

Inquiry for Materiel Receipt (Supply), available at: http://www.dla.mil/j-6/dlmso/eLibrary/Changes/rfid.asp 

4. REQUESTED CHANGE: Significant changes from PDC 408 are highlighted in yellow. 

a. Description of Change: 

1) This change formally highlights the capability of DLMS 846A Asset Reclassification 

transaction (reference 3a) and associated procedures which were published in DOD 4000.25-M, 

DLMS (reference 3b) years ago based upon a 1989 DLMS enhancement (reference 3c). 

Modifications to the 846A DLMS transaction notes and the procedures are also being made by this 

change.

2) The 846A provides capability for:

a) Asset Reclassification Request and Asset Reclassification Follow-up. Owners 

use to request assets be reclassified from one SCC to another; and owners use to follow up on a 

previously submitted request when no response was received.

b) Asset Reclassification Denial. Storage activities use to deny a request. (Positive 

response is the appropriate inventory adjustment transaction (947I for dual SCC change (MILSTRAP 

DAC functionality). NOTE: Under the original enhancement, the DOD Components were to develop 

codes to provide the reason(s) an Asset Reclassification Request transaction was denied, however 
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ADC 387 Att 

reasons were never identified to DLMSO. Further, no reasons/codes were identified/submitted in 

response to PDC 408. Accordingly, no asset reclassification denial codes are assigned, and the 

storage activity cannot use the denial function for denying an Asset Reclassification Request for 

SCC change at this time. As denial reasons are identified, they may be submitted in a PDC. 

NOTE: Asset Reclassification Denial Codes specific to DLA and Navy Base Realignment and Closure 

(BRAC) Retail Supply, Storage and Distribution (SS&D)/Inventory Management and Stock Positioning 

(IMSP) were identified under PDC 376A (reference 3d), but they do not apply to the asset 

reclassification requests for SCC change covered by ADC 387. See paragraph 4.c.3. 

c) Asset Reclassification Extension Request. Storage activities use to request an 

extension on the timeframe for the reclassification request. 

d) Asset Reclassification Extension Response. Owners use to approve or 

disapprove the asset reclassification extension request.

3) DLMS enhancement 89-077 description states: “Provide a means for ICPs to direct 

storage activities to reclassify materiel. In the present MILSTRAP the ICP is responsible for 

monitoring assets held in a suspended supply condition code and ensuring that the materiel is 

reclassified within prescribed timeframes. There are several circumstances when the ICP needs to 

tell the storage activity to effect the reclassification action: when the storage activity is 

responsible for the action and the timeframe has expired; when the ICP wishes to expedite a 

reclassification action for which the storage activity is responsible; when the ICP has resolved 

the situation which required the assets to be held in a suspended condition (e.g., completion of 

litigation or technical inspection). Under the present system constraints, we have been unable to 

develop a transaction which contains all the data elements required for the ICP to direct such actions; 

consequently, the communications must be effected via telephone or correspondence.” 

NOTE: The enhancement was written in 1989 and “present system constraints” refers to the 80-record 

position MILSTRAP transactions in use at that time. 

NOTE: The enhancement identified 3 specific circumstances under which the ICP would send an asset 

reclassification request (bold text in paragraph 3) above). By this ADC DLMSO has modified the 846A 

Asset Reclassification Request to specify the reason for the request through use of beginning segment 

action codes.

b. Background: 

1) The asset reclassification function was identified for automation under the DLMS as 

documented in DLMS enhancement 89-077. While the DS 846A and associated DLMS procedures 

have been published for years, DLMSO does not believe the DOD Components implemented this 

enhanced capability. Accordingly this ADC documents and highlights that this capability is 

available under DLMS. There are no MILSTRIP/MILSTRAP equivalent transactions.

2) Additionally, DS 846A and associated procedures have been identified for expanded 

capability under Navy-DLA Base Realignment and Closure BRAC SS&D/IMSP. Changes to the DS 

846A to accommodate the expanded requirements were staffed by PDC 376A . 

c. Detailed Procedure: 

1) DOD 4000.25-M, DLMS, Volume 2, chapter 7, Inventory Adjustment: 

a) Chapter 7, which includes the procedures Asset Reclassification, is provided at 

Enclosure 2. The sections specific to Asset Reclassification are highlighted in yellow.
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ADC 387 Att 

b) Administrative updates to chapter 7. While this chapter is being revised by this 

ADC, the MILSTRAP Administrator also made administrative updates to support the ongoing DLMSO 

initiative to combine the DLMS and MILSTRAP manuals, as discussed at the 2008 and 2009 Supply PRC 

Meetings. The current process of maintaining two sets of publications, which contain essentially the same 

information for the different formats, is resource intensive, duplicative in nature, and no longer practical. 

This change makes administrative updates to the chapter to capture the correlation between MILSTRAP DI 

Codes (for inventory adjustments) and the DLMS. These changes position the chapter for movement to a 

combined manual at a future date. 

2) The response to an Asset Reclassification Request for SCC change will either be a 947I 

dual inventory adjustment for SCC change (DI Code DAC functionality), or an Asset Reclassification 

Denial Transaction. When the storage activity receives an Asset Reclassification Follow-up 

Transaction from the owner, for which an inventory adjustment transaction was already provided, the 

storage activity will provide a duplicate inventory adjustment transaction, coded to identify that it is a 

duplicate being sent in response to the asset reclassification follow-up. 

NOTE: DLMS/MILSTRIP Advice Codes were revised by the Request for Implementation Date for 

ADC 313 (reference 3e) to identify in the MILSTRIP (reference 3.f), Appendix AP2.15, Advice 

Codes, a separate category applicable to ‘DLMS Receipt, Response to Receipt Inquiry, and Inventory 

Adjustment Transaction Advice Codes’. That code list change included the following code for 947I: 

Change from ADC 313 are identified by red, bold italics: 

Revise MILSTRIP Appendix AP2.15 Advice Codes (as revised by Request for Implementation 

Date for ADC 313): 

DLMS RECEIPT, RESPONSE TO RECEIPT INQUIRY, AND INVENTORY 

ADJUSTMENT TRANSACTION ADVICE CODES 13

ADVICE 

CODE 

EXPLANATION 

3K Storage activity response to inquiry for receipt status. Storage activity has the receipt 

in process. 

3M Storage activity response to inquiry for receipt status. Storage activity has no receipt 

in process but there is a Prepositioned Materiel Receipt (PMR)) file. 

3N Storage activity response to inquiry for receipt status. Storage activity has no receipt 

in process and no record of the due-in/PMR. 

3P Storage activity uses in response to inquiry for status on receipt or asset

reclassification follow-up, to indicate that the transaction being submitted is a 

duplicate of the original receipt or inventory adjustment transaction provided by 

the storage activity. Caution must be used by recipient to assure the transaction 

is not processed twice. 

13DLMS enhancement. Not for use in related MILSTRAP transactions. 

 

3) Asset Reclassification Denial Codes1. CODES ARE NOT CURRENTLY 

AVAILABLE FOR USE TO DENY ASSET RECLASSIFICATION REQUEST FOR SCC 

CHANGE. The Asset Reclassification Denial Codes identify Storage Activity reason(s) for 

denying an Asset Reclassification Request. Codes were to be developed for when the storage 

 

1

 Asset Reclassification Denial codes specific to BRAC SS&D requirements are identified in PDC 376A (reference 3d). 
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ADC 387 Att 

activity could not accomplish the requested SCC reclassification. However to date, no reasons for 

denying Asset Reclassification Requests for SCC change have been identified to DLMSO. 

DLMSO requested codes be identified as part of PDC 408 staffing, but none were identified. 

Accordingly, as codes are identified by a Component, they must be submitted as a PDC. These 

codes, once identified and agreed upon, will be added to the Asset Reclassification Denial Code list. 

DLMSO is submitting an ASC X12 data maintenance request for a new LQ data element ID 1270 

qualifier for Asset Reclassification Denial Code. Since 846A is an enhancement in its entirety, there is 

no MILS equivalent transaction which it must map to, it lends itself to creation of a new code list 

specific to this function. 

4) Update the DLMS Supplement 846A as follows: 

Item # Location DS 846A Asset Reclassification Reason 

1. DLMS 

Introductory 

Notes 

Add ADC 387 to DLMS Introductory note 6:

- ADC 387, DLMS Enhancement: DS 846A Asset 

Reclassification Transaction and Associated 

Procedures (Supply) 

Identifies DLMS Changes included 

in the DLMS Supplement 

2. 1/BIA02/20 Make the following administrative updates to the Report 

Type Codes:

AR Asset Reclassification Extension Request 

DLMS Note: Distribution depots/storage activities use 

for Asset Reclassification Extension Request 

Transactions.

AX Asset Reclassification Extension Response 

DLMS Note: Owners use for Asset Reclassification 

Extension Response Transactions. When disapproving 

an extension request, must use in conjunction with 

BIA06 Action Code 21. 

TD Asset Reclassification Response 

DLMS Note: Distribution depots/storage activities use 

for Asset Reclassification Denial Transactions. Must 

cite appropriate asset reclassification denial code in 

2/LQ01-02/376. NOTE: Distribution depots/storage 

activities may not deny Asset Reclassification Request 

Transactions for supply condition code (SCC) change 

at this time since no reasons for denial of SCC Asset 

Reclassification Requests have been identified. 

TE Asset Reclassification Request 

DLMS Note:  Owners use for Asset Reclassification 

Request Transactions. Must use in conjunction with 

appropriate BIA06 action code identifying the reason 

for the request; or, for Asset Reclassification Request 

Follow-up Transactions, must use in conjunction with 

BIA06 Action Code 82.

Administrative updates. 

As reasons for denying Asset 

Reclassification Request 

Transactions for SCC Change are 

identified, they must be submitted to 

DLMSO by a PDC. 
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ADC 387 Att 

Item # Location DS 846A Asset Reclassification Reason 

3. 1/BIA06/20 Open BIA06 Action Codes and add qualifiers with DLMS 

notes as follows:

21 DISAPPROVE 

DLMS Note: Disapproval of extension request. Owners use 

with Asset Reclassification Extension Response Transaction 

only when disapproving an extension request; otherwise do 

not use. Used with BIA02 code AX only. 

23 ESCALATION 

DLMS Note: Request to Expedite SCC Reclassification. 

Owner/manager uses to request storage activity expedite an 

SCC reclassification action for which the storage activity is 

responsible. ‘FROM’ and ‘TO’ SCCs are not identified in 

2/LQ/376, only the current SCC is identified. Used with 

BIA02 code TE only. 

62 RESOLVE 

DLMS Note: Resolution of SCC Suspension.

Owner/manager uses to request storage activity reclassify 

assets from one SCC to another, when the owner/manager has 

resolved the situation which required the assets to be held in a 

suspended condition (e.g., completion of litigation or 

technical inspection). ‘FROM’ and ‘TO’ SCCs will be 

identified in 2/LQ/376. Used with BIA02 code TE only. 

T STATUS QUERY 

82 FOLLOW UP 

DLMS Note: Asset Reclassification Request Followup. Use to follow-up on previously submitted Asset 

Reclassification Request for supply condition code 

change. Use when no response (either an inventory 

adjustment transaction or an Asset Reclassification 

Denial transaction) was received. Used with BIA02 

code TE only. 

86 PENDED FOR FOLLOW UP 

DLMS Note: SCC Reclassification Timeframe Expired. 

Owner/manager uses to request SCC reclassification when the 

storage activity is responsible for the SCC reclassification 

action and the timeframe has expired. ‘FROM’ and ‘TO’ 

SCCs are not identified in 2/LQ/376, only the current SCC. 

Used with BIA02 code TE only. 

Use of Action Codes identifies the 

type of SCC asset reclassification 

being requested based on DLMS 

enhancement 89-077 which cited the 

following circumstances for 

requesting a SSC reclassification: 

--when the storage activity is 

responsible for the action and the 

timeframe has expired [see Action 

Code 86-Pended for Follow Up]; 

--when the ICP wishes to expedite a 

reclassification action for which the 

storage activity is responsible [see 

Action Code 23-Escalation]; 

--when the ICP has resolved the 

situation which required the assets to 

be held in a suspended condition 

(e.g., completion of litigation or 

technical inspection) [see Action 

Code 62-Resolve]. 

Use of Action Code ‘21’ provides 

clearer identification when owner is 

disapproving an extension request. 

Identifies extension disapproval at the 

beginning segment action code, rather 

than an LIN01 code. 

Use of an Action Code for the follow up 

transaction provides clearer 

differentiation between the Asset 

Reclassification Request and Follow-up. 

PDC 408 proposed code ‘T-Status 

Query’, but this change approves use 

of code ‘82-Follow Up’ to cite more 

accurate qualifier.

 

NOTE: PDC 376A identifies additional 

action codes for types of asset 

reclassification requests to support 

BRAC IMSP SS&D. 
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ADC 387 Att 

Item # Location DS 846A Asset Reclassification Reason 

4. 2/LIN01/10 Mark LIN01’Not Used’.

DLMS Note: Must use with asset reclassification 

request transactions (1/BIA/020/BIA02 code TE) to 

differentiate between a request and an inquiry; must use 

with asset reclassification extension (1/BIA/020/BIA02 

code AR, AX, or TD) response transactions only when 

disapproving an extension request; otherwise do not 

use. Cite one of the following codes:

1 - Owner asset reclassification request. 

2 - Owner asset reclassification Inquiry.

3 Disapproval for asset reclassification extension 

request.

Eliminates use of LIN01 codes in 

favor of using beginning segment 

action codes (see row 3 above). 

Eliminate use of an LIN01 code ‘1’ 

and ‘2’ to differentiate between an 

asset reclassification request and 

follow-up, in favor of using BIA06 

action code ‘82’. 

Eliminate use of an LIN01 code ‘3’ 

to identify disapproval of an asset 

reclassification extension request, in 

favor of using a BIA06 action code 

‘21’. 

5. 2/REF01/140 Administrative update to various DLMS notes as follows:

C7 Contract Line Item Number 

Revise first sentence of DLMS Note 1: 

DLMS Note: 

1. Use a second occurrence of code C7, as needed. , for 

the reclassification request only. The first occurrence in 

2/CS04/240 identifies the current categorization associated 

with the suspended or suspected material. The second 

occurrence identifies the categorization as needed to identify 

the 

Contract Line Item Number (CLIN), or the CLIN including 

the Subcontract Line Item Number (SUBCLIN) to which the 

suspended or suspected material should be reclassified. 

2. Use in asset reclassification request/follow-up 

transactions.

F8 Original Reference Number 

Revise the DLMS note: 

Use in asset reclassification request transactions to 

identify the transaction document number previously 

assigned to the receipt for which reclassification is 

requested. For suspended receipts, cite the transaction

document number of the material receipt. For suspended 

material previously transferred to a suspended condition as 

a result of an inventory adjustment, cite the transaction

document number of the adjustment. 

TN Transaction Reference Number 

Revise the DLMS note: 

For suspected items in a non-suspended condition, cite the 

Inventory Control Point (ICP) assigned transaction

document number controlling the reclassification action. 

Administrative updates. 

Administrative update to code C7 to 

remove conflict with DLMS note 2 

which states C7 is used in asset 

reclassification request and follow-up 

transactions. 

Administrative updates to codes F8 

and TN DLMS notes to reflect that 

the ‘transaction reference number’ is 

the ‘document number’. 
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ADC 387 Att 

Item # Location DS 846A Asset Reclassification Reason 

6. 2/REF04-01/ 

140 

Revise DLMS note for qualifier W8:

W8 Suffix 

DLMS Note: Use to identify the suffix code associated 

with REF01 code F8. 

Administrative update 

7. 2/LQ/376 Add segment level DLMS note:

DLMS Note: Use multiple iterations of the LQ segment to 

provide information as needed. Use to identify codes, as 

appropriate, consistent with management information 

requirements. 

DLMS note for use of the segment. 

8. 2/LQ01/376 Delete DLMS note 2

2. Use two occurrences of codes 83 and 87 as needed 

for reclassification requests. The first occurrence 

identifies the current classification associated with 

suspended or suspected material. The second 

occurrence of each code identifies the classification 

to which the suspended or suspected material should 

be reclassified.

Eliminates use of positioning to 

identify two distinct codes (e.g., first 

iteration of LQ = old SCC and 

second iteration of LQ = new SCC) 

NOTE: Also eliminates subsistence 

type pack (qualifier 87) as a code that 

can be changed by the Asset 

Reclassification Request transaction. 

If there is a business case for using this 

transaction for the owner to request 

that the storage activity change 

materiel from one subsistence type of 

pack code to another, request 

interested Component(s) identify the 

business case/process in response to 

this PDC, and it can be included in the 

subsequent ADC. 
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ADC 387 Att 

Item # Location DS 846A Asset Reclassification Reason 

9. 2/LQ01/376 Revise DLMS notes for qualifier 83 and add new qualifier 

BG and Local Code ‘ARD’ with DLMS note:

83 Supply Condition Code 

DLMS Note: 

1. Use to identify the supply condition code (SCC) of the 

materiel. 

2. For asset reclassification requests when the

owner/manager has resolved the situation which 

required the assets to be held in a suspended condition

(BIA02 code TE with BIA06 code 62) this is the ‘TO’ 

SCC. The ‘FROM’ SCC uses qualifier ‘BG’. 

3. Use in asset reclassification request and asset 

reclassification request follow-up transactions.

BG Condition 

DLMS Note: For use with asset reclassification 

requests for supply condition code (SCC) change, when 

the owner/manager has resolved the situation which 

required the assets to be held in a suspended condition. 

This is the ‘FROM’ SCC. The ‘TO’ SCC uses qualifier 

‘83’. BG is only for use with BIA02 code TE with 

BIA06 code 62.

Add a new Local Code ‘ARD’ with DLMS note:

ARD Asset Reclassification Denial Code 

DLMS Note: Storage activities must use with Asset 

Reclassification Denial Transactions (BIA02 code TD) to 

identify the reason for the denial. 

At this time a local code ‘ARD’ is established for use in 

846A, version 4010. A data maintenance action will be 

submitted for establishment o f ‘ARD-Asset 

Reclassification Denial Code’ in a future version. 

To distinctly identify the old supply 

condition code, so that old and new 

codes have distinct qualifiers, rather 

than use positioning to identify (e.g., 

first iteration of LQ = old code and 

second iteration of LQ = new code). 

This use of qualifiers is consistent 

with 947I Inventory adjustment TO 

and From supply condition code 

usage. 

Local Code ‘ARD-is assigned. 

DLMSO will submit an ANSI ASC 

X12 data maintenance request to 

establish ASC X12 1270 ID code 

‘ARD’. Once approved by ANSI for a 

future version, ‘ARD’ will become a 

migration code for use in 846A. 

NOTE: As addressed earlier in 

ADC, no denial codes for Asset 

reclassification request for SCC 

change have been identified to date.

5) Administrative Updates to DS 947I, Inventory Adjustment (changes will be made in 

version 4030 and version 4010). 

Item # Location Administrative Revisions to 947I 

Inventory Adjustment

Reason 

1. DLMS 

Introductory

Note 

Add ADC 387 to Introductory note 7

- ADC 387, DLMS Enhancement: DS 846A Asset 

Reclassification Transaction and Associated Procedures, and 

Administrative Update to DS 947I Inventory Adjustment 

(Supply) 

To identify DLMS changes 

included in the DS 
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ADC 387 Att 

Item # Location Administrative Revisions to 947I 

Inventory Adjustment

Reason 

2. 2/LQ01/ 

1000

Revise DLMS Note for Qualifier 80:

80 Advice Code 

Current DLMS note: DLMS enhancement; see 

introductory DLMS note 4a.

New DLMS Note: Use when submitting a duplicate 

inventory adjustment transaction in reply to an asset 

reclassification follow-up transaction (Advice Code 

3P); otherwise do not use. Authorized DLMS 

enhancement. Refer to ADC 387. 

Administrative update to cite 

applicable advice code for 

inventory adjustment since only 

one advice code applies to this 

transaction. 

3. Make the following administrative updates to the 2/W1901/0200 Quantity or Status 

Adjustment Reason Codes to align the DLMS notes more closely with the corresponding 

MILSTRAP DI Code explanation, 

2/W1901/0200 Code being 

updated

Revise the DLMS Notes as follows: 

AA Physical Count Inventory Adjustment (Physical Inventory). Gain or loss disclosed as a result of 

physical count of stock, single adjustment. (DI Code D8A or D9A functionality) 

AB Accounting Error Inventory Adjustment (Accounting Error). Gain or loss resulting from clerical or 

automated information system errors which are not subject to correction by 

reversal of original transaction, single adjustment. DI Code D8B or D9B 

functionality) 

AC Condition Change Inventory Adjustment (Supply Condition). Gain, loss or dual adjustment resulting 

from supply condition code transfer. (DI Code D8C or D9C or DAC functionality) 

AD Purpose Change Inventory Adjustment (Purpose). Gain, loss or dual adjustment resulting from 

purpose transfer. (DI Code D8D or D9D or DAD functionality) 

AE Reidentification Inventory Adjustment (Reidentification). Gain resulting from inspection of an item 

in stock which has been misidentified, single adjustment. (DI Code D8J or D9J 

functionality) 

AF Stock Number Change Inventory Adjustment (Stock Number Change). Gain or loss resulting from stock 

number change. Excludes change of unit price only. (DI Code D8K or D9K 

functionality) 

AG Ownership Change Inventory Adjustment (Ownership). Gain, loss, or dual adjustment resulting from 

ownership transfer by the SMCA. Use is restricted to users of the conventional 

ammunition system. (DI Code D8S or D9S or DAS functionality) 

AH Other Inventory Adjustment (Other). Gain or loss for which a specific code is not 

otherwise provided. (Assignor of code will maintain detailed intelligence 

pertaining to its use and, as required, will furnish these data.) (DI Code D8Z or 

D9Z functionality) 

AI Disaster Inventory Adjustment Decrease (Disaster). Loss from major disasters, fire loss, 

enemy action, act of God, or similar circumstance, single adjustment. (DI Code 

D9H functionality) 

AJ Survey Inventory Adjustment Decrease (Survey Process). Loss from shrinkage, theft 

contamination, deterioration, and/or expired shelf life, single adjustment. (DI 

Code D9G functionality) 
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ADC 387 Att 

Administrative Revisions to 947I Inventory Adjustment 

2/W1901/0200 Code being 

updated

Revise the DLMS Notes as follows: 

AK Transfer Inventory Adjustment (Logistics Transfer). Gain or loss of item management 

responsibility as a result of logistics transfer. (DI Code D8E or D9E functionality) 

AL Capitalization Inventory Adjustment (Capitalization). Gain to, or loss from, a stock fund or stock 

fund division at time of activation or subsequent extension/ expansion, as result of 

capitalization. (DI Code D8F or D9F functionality) 

AN Unit of Issue Change Inventory Adjustment (Unit of Issue Changes). Gain or loss resulting from unit of 

issue changes. Excludes change of unit price only. (DI Code D8K or D9K 

functionality)

AP Product/Formula 

Evaluation and Testing

Code ‘AP’ is from PDC 

405 which is not yet 

approved. 

1. Inventory Adjustment (Destructive Test). Loss resulting from destructive test. 

Authorized for Navy and DLA use to support BRAC SS&D IMSP. Refer to PDC 

405. 

2. Except as noted above, this is a DLMS enhancement; see introductory DLMS note 4a.

5. REASON FOR CHANGE: Documents and highlights DLMS transaction/capability which provides 

means for ICPs to direct storage activities to reclassify material from one SCC to another SCC.

6. ADVANTAGES AND DISADVANTAGES: 

a. Advantages: Allows automation of a manual process. 

b. Disadvantages: None identified.

7. PLANNED IMPLEMENTATION DATE: Request DLA (for EBS and DSS) and the Services 

identify a target implementation date. DOD Components had not yet identified their target 

implementation dates as of the publication date for this ADC. 

8. IMPACT: 

a. Publications:

(1) Requires update to DS 846I and 947I.

(2) Requires update to DOD 4000.25-M, DLMS, Volume 2, chapter 7, as shown at Enclosure 2.

b. Automated Information Systems (AIS): DOD Component logistics AIS. 

c. DAASC maps. There is no mapping requirement between MILS TRAP and 846A, but DAASC 

documentation for 846A requires update as needed.

d. DLMS Data: 

a. Identifies requirement for a new ASC X12 data element ID 1270 for Asset Reclassification 

Denial Code. [Code values not yet identified for denial of Asset Reclassification Request for SCC change.]. 

b. Adds existing DLMS data element “Transaction Action Code” to 846A with code values 

21, 23, 62, 82, and 86. 
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ADC 387 Att 

c. Closes 846A LIN01 which identified “code” values that are now accommodated by BIA06 

Action Codes. NOTE: LIN01 will be reopened for use by ADC 376 to support a Navy BRAC 

SS&D/IMSP requirement.

10. COMMENT TABLE FOR PDC 408: 

COMPONENT RESPONSE/COMMENT DLMSO DISPOSITION 

Army Concurs with PDC 408 Noted. 

Navy Concurs with PDC 408 as written and submits no 

additional changes or amendments. 

Noted. 

Air Force Concurs with PDC without comment. Noted. 

Marine Corps Concurs as written. Noted. 

DLA DLA concurs, with comment: 

From the RFID Team: 

Concur to the PDC 408, but had a recommendation. 

If they are creating this DLMS message, they should 

consider a spot for pRFID tags associated to an 

unique assets to lot. This would go hand and hand 

with the Chemical suits lots, etc. being pRFID 

tagged. 

The pRFID comment DLA provided 

identifies a new requirement which DLA 

would need to submit as a PDC if 

interested in pursuing for DS 846A. 

However please note that the 846A 

request for Supply condition code (SCC) 

change is initiated by the ICP to the 

depot. It is not clear to DLMSO how the 

ICP can identify the pRFID in the 

transaction, since it is not stored in ICP 

records. 

The depot response to the 846A is either 

a 947I inventory adjustment changing 

the SCC, or an 846A response denying 

the request because they were not able to 

change the SCC. 
ADC 387 

Enclosure 1 

ENCLOSURE 1 TO ADC 387 
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ADC 387 

Enclosure 2 

ENCLOSURE 2 TO ADC 387 

DLMS, Volume 2, Chapter 7 

The sections of chapter 7 which are address Asset Reclassification are highlighted in gray to facilitate 

your review. Changes from current DLMS chapter 7 Asset Reclassification procedures are in red, bold 

italics. Changes which are red, bold, italics but are not highlighted in yellow are administrative 

updates,as discussed in the PDC, and are not specific to asset reclassification. 

C7. CHAPTER 7

INVENTORY ADJUSTMENT AND ASSET 

RECLASSIFICATION TRANSACTIONS

C7.1. GENERAL

 C7.1.1. Purpose. 

 C7.1.1.1. This chapter provides procedures relating to the following types of 

inventory adjustment and change actions: 

 C7.1.1.1.1. Adjustments caused by catalog change actions. 

 C7.1.1.1.2. Reidentification of improperly identified materiel. 

 C7.1.1.1.3. Offsetting adjustments to purpose and condition codes. 

 C7.1.1.1.4. Discrepancies disclosed by physical inventory. 

 C7.1.1.1.5. Ownership gains and losses applicable to Single Manger for 

Conventional Ammunition (SMCA). 

 C7.1.1.1.6. Accounting for materiel during maintenance. 

 C7.1.1.2. This chapter also provides procedures relating to the Asset 

Reclassification transaction. 

 C7.1.2. Transactions. This chapter addresses the procedures applicable to 

Inventory Adjustment function identified by DLMS Supplement (DS) to Federal IC 947I, 

and the Asset Reclassification function identified by DS to Federal IC 846A. DS 947I 

has corresponding MILSTRAP transactions. DS 846A is a DLMS enhancement with no 

corresponding MILSTRAP transactions. 

 C7.1.2.1. Inventory Adjustment. The inventory adjustment function is 

identified by DS 947I ASC X12 beginning segment (1/W1505) Transaction Type Code 

NU - Inventory Adjustment, and its DLSS (MILSTRAP) counterpart identified by 

document identifier (DI) codes. Both are covered in this chapter to allow for 
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ADC 387 

Enclosure 2 

processing in a mixed DLMS/DLSS environment as needed. Other formats, such as 

XML, are also available. See the DLMSO website for available DLMS and DLSS 

formats: http://www.dla.mil/j-6/dlmso/elibrary/TransFormats/140_997.asp. 

C7.1.2.1.1. The inventory adjustment function encompasses increases, 

decreases, or dual adjustments. This relates to MILSTRAP DI Codes D8_ (increase), 

D9_ (decrease), or DAC/DAD/DAS (dual adjustment) respectively. 

C7.1.2.1.2. Inventory adjustments are further broken down by the AXC 

X12 Warehouse Adjustment Item Detail segment Quantity or Status Adjustment 

Reason (QSAR) Codes (947I segment W1901). The QSAR Codes correlate to the 3rd

position of MILSTRAP DI Codes D8_/D9_ or DAC/DAD/DAS as follows: 

Table C7.T.1 DLSS DI Code/DLMS QSAR Code Correlation 

W1901 Quantity or 

Status Adjustment 

Reason (QSAR) 

Code 

Explanation Corresponding 

MILSTRAP DI 

Code 

AA Inventory Adjustment (Physical Inventory). Gain or 

loss disclosed as a result of physical count of 

stock, single adjustment. 

D8A or D9A 

AB Inventory Adjustment (Accounting Error). Gain or 

loss resulting from clerical or automated 

information system errors which are not subject to 

correction by reversal of original transaction, single 

adjustment. 

D8B or D9B 

AC Inventory Adjustment (Condition). Gain, loss or 

dual adjustment resulting from condition transfer. 

D8C or D9C or 

DAC 

AD Inventory Adjustment (Purpose). Gain, loss or dual 

adjustment resulting from purpose transfer. 

D8D or D9D or 

DAD 

AK Inventory Adjustment (Logistics Transfer). Gain or 

loss of item management responsibility as a result 

of logistics transfer. 

D8E or D9E 

AL Inventory Adjustment (Capitalization). Gain to, or 

loss from, a stock fund or stock fund division at 

time of activation or subsequent extension/ 

expansion, as result of capitalization, 

D8F or D9F 

AJ Inventory Adjustment Decrease (Survey Process). 

Loss from shrinkage, theft contamination, 

deterioration, and/or expired shelf life, single 

adjustment. 

D9G only 

AI Inventory Adjustment Decrease (Disaster). Loss 

from major disasters, fire loss, enemy action, act of 

God, etc., single adjustment. 

D9H only 
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W1901 Quantity or 

Status Adjustment 

Reason (QSAR) 

Code 

Explanation Corresponding 

MILSTRAP DI 

Code 

AE Inventory Adjustment (Reidentification). Gain 

resulting from inspection of an item in stock which 

has been misidentified, single adjustment. 

D8J or D9J 

AF Inventory Adjustment (Stock Number Changes). 

Gain or loss resulting from stock number change. 

Excludes change of unit price only. 

D8K or D9K 

Inventory 

Adjustment 

(Catalog 

Changes). Gain 

or loss 

resulting from 

stock number 

and/or unit of 

issue changes, 

single 

adjustment. 

Excludes 

change of unit 

price only. 

AN Inventory Adjustment (Unit of Issue Changes). Gain 

or loss resulting from unit of issue changes. 

Excludes change of unit price only.

AG Inventory Adjustment (Ownership). Gain, loss, or 

dual adjustment resulting from ownership transfer 

by the SMCA. Use is restricted to users of the 

conventional ammunition system. 

D8S or D9S or 

DAS 

AH Inventory Adjustment (Other). Gain or loss for 

which a specific code is not otherwise provided. 

(Assignor of code will maintain detailed intelligence 

pertaining to its use and, as required, will furnish 

these data.) 

D8Z or D9Z 

 C7.1.2.2. Asset Reclassification. The Asset Reclassification transaction is a 

DLMS enhancement and there are no corresponding MILSTRAP transactions. DS

846A Asset Reclassification is used for the following transaction functions identified 

by DS 846A ASC X12 beginning segment (1/BIA02) Report Type Codes: 

 C7.1.2.2.1. Asset Reclassification Request Transactions are identified 

by Report Type Code TE. Owners use this function for Asset Reclassification Request 

Transactions and Asset Reclassification Follow-up Transactions. The types of Asset 

Reclassification Requests, as well as the Asset Reclassification Request Follow-up 

Transaction, are further delineated by a variety of BIA06 action codes. 

 C7.1.2.2.2. Asset Reclassification Denial Transaction is identified by 

Report Type Code TD. Distribution depots/storage activities generate this transaction. 

Using Asset Reclassification Request Denial Codes identify the reason a request was 

denied. (No reasons for denial have been identified for asst reclassification requests 

associated with SCC reclassification.) 
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Enclosure 2 

 C7.1.2.2.3. Asset Reclassification Extension Request Transaction is 

identified by Report Type Code AR. Distribution depots/storage activities generate 

this transaction. 

 C7.1.2.2.4. Asset Reclassification Extension Response Transaction is 

identified by Report Type Code AX. Owners generate this transaction. 

 C7.1.3. Adjustment Actions. Two methods are provided for effecting adjustments—

single or dual actions. 

 C7.1.3.1. Single Adjustment. The single adjustment method accommodates 

processing techniques that use individual increase or decrease adjustment actions against 

the accountable and owner records. 

 C7.1.3.1.1. Increase. Identify single increase adjustments by using 947I

W1916 Inventory Transaction Type Code AJ – ‘Inventory Adjustment’, or MILSTRAP DI 

Code D8_. 

 C7.1.3.1.2. Decrease. Identify single decrease adjustments by using 

947I W1916 Inventory Transaction Type Code AD – ‘Inventory Adjustment – Decrease’, 

or MILSTRAP DI Code D9_. 

 C7.1.3.2. Dual Adjustment. The dual adjustment method provides for offsetting 

adjustments to condition or purpose code in a single adjustment transaction. Identify dual 

inventory adjustments by using 947I W1916 Inventory Transaction Type Code DU – 

‘Inventory Adjustment Dual’, or MILSTRAP DI Code DAC, DAD, or DAS.

 C7.1.3.3. Single Transaction Prescribed. When the DoD Component practice 

prescribes the use of single adjustment transactions internally for condition or purpose 

transfer, make provisions for acceptance and processing of dual adjustments from other DoD 

Components (947I Transaction Type Code DU with QSAR Code AC or AD, or MILSTRAP 

DI Code DAC or DAD). 

C7.1.4. Ownership/Purpose Code Changes. Changes between ownership codes, from 

purpose code to ownership code, or from ownership code to purpose code, shall not be 

made by an adjustment action. Process appropriate issue and receipt transactions to make 

the necessary accounting actions. An exception to this rule is the use of the ownership 

change and inventory adjustment, DS 947I, and corresponding single adjustments dual or 

single Inventory Adjustment Transactions to accomplish ownership gain/loss under the 

SMCA concept (see section C7.3., below). 

C7.1.5. See Table C7.T.1, on page C7-2, for reasons for processing inventory 

adjustment transactions. 

C7.2. CHANGES IN SUPPLY CONDITION OF MATERIEL

 C7.2.1. Supply Condition Reclassification of Assets in Storage

 C7.2.1.1. Reporting Classification Variance to Owners. When inspection of stocks 

on hand reveals that a Supply Condition Code (SCC) reclassification is required, storage 

activities shall report the variance to the owner within 3 calendar days using a dual Inventory 
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Adjustment Transaction for SCC change (DS 947I with QSAR Code AC (Condition 

Change) or MILSTRAP DI Code DAC) for the affected condition codes. 

 C7.2.1.2. Changing Suspect Stock to SCC J (Suspended (In Stock)). When 

immediate reclassification of suspect stocks is beyond current capabilities, transfer the 

materiel to SCC J using a dual inventory adjustment for SCC change (DS 947I with QSAR 

Code AC (Condition Change) or MILSTRAP DI Code DAC) for the affected condition 

codes. 

 C7.2.1.2.1. Reclassification Timeframe for SCC J. With the exception of 

ammunition, complete the materiel reclassification within 90 calendar days after reporting the 

change to the owner. Complete the reclassification of ammunition within 270 calendar days 

after reporting the original SCC change. 

 C7.2.1.2.2. Reporting Completion of Reclassification. When the 

reclassification is complete, report the change to the owner using dual Inventory 

Adjustment Transaction for SCC change (DS 947I with QSAR Code AC (Condition 

Change) or MILSTRAP DI Code DAC) change and adjustment transaction. Use the same 

document number (also known as the transaction reference number) used to report the 

materiel in SCC J. 

 C7.2.2. Reclassification of SCC Q (Suspended (Product Quality Deficiency)) Related 

Materiel

 C7.2.2.1. Storage Activities shall report discrepant receipts in SCC Q as 

prescribed by Chapter 13 receipt processing procedures. When directed by the owner, 

storage activities shall also transfer stored, including suspended, materiel to SCC Q and 

report the action using a dual inventory adjustment transaction following subparagraph 

C7.2.1.1. 

 C7.2.2.2. When inspection or technical/engineering analysis of materiel confirms a 

product quality deficiency, possibilities for other use of the materiel within the Department of 

Defense, as well as public health/safety and national security interests, must be considered. 

Owners shall determine if further use of the item can be made within the Department of 

Defense. 

 C7.2.2.3. When inspection of technical/engineering analysis of materiel indicates 

that litigation action is required, the owner shall direct transfer of the materiel to SCC L. 

 C7.2.2.4. If the deficiency does not prohibit further DoD use (i.e., the defect is 

minor or the item meets specifications for another NSN), owners shall direct storage activities 

to reidentify and/or transfer the suspended SCC Q materiel to the appropriate condition. 

Storage activities shall, within 3 calendar days from receipt of the ICP direction, reclassify the 

SCC Q materiel to the appropriate condition. Report completion of this action with an 

Inventory Adjustment Transaction using the same document number originally used to report 

the materiel in SCC Q (i.e., the document number of the original receipt or adjustment 

transaction). For reidentification, storage activities shall follow section C7.7. procedures. 

 C7.2.2.5. If the deficiency prohibits further DoD use, the materiel shall remain in 

SCC Q and owners shall direct transfer of the materiel to DRMOs following Chapter 16 
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procedures. Improperly documented, unauthorized source, defective, non-repairable, and 

time-expired Aviation CSI/FSCAP materiel that is not mutilated by the holding activity shall be 

directed to the DRMO in SCC Q with Management Code S. All such materiel shall be 

mutilated. When turning such Aviation CSI/FSCAP into a DRMO, the turn-in document must 

be clearly annotated that the part is defective, non-repairable, time-expired, or otherwise 

deficient and that mutilation is required. 

 C7.2.3. Reclassification of SCC L Receipts 

 C7.2.3.1. Storage Activity Reporting. Storage activities shall report discrepant 

receipts from procurement and materiel held pending resolution of a transportation 

discrepancy in SCC L as prescribed by Chapter 13. When directed by the owner (see 

paragraph C7.2.7., below), storage activates shall also transfer materiel to SCC L and report 

the action with an inventory adjustment transaction following paragraph C7.2.1. procedures. 

 C7.2.3.2. Materiel Owner Responsibilities. Owners are responsible for monitoring 

materiel suspended in SCC L and directing change of the materiel to its correct condition 

when litigation or other action to resolve the discrepancy is completed using an Asset 

Reclassification Request Transaction in accordance with paragraph C7.2.7. If inspection or 

technical/engineering analysis confirms that a product quality deficiency prohibits further use 

of the materiel within the Department of Defense, the owner shall direct transfer of the 

materiel to SCC Q. 

 C7.2.3.3. Reclassification Procedures. When directed by the owner, storage 

activities shall, within 3 calendar days from receipt of an Asset Reclassification Request 

Transaction, reclassify the suspended materiel to its correct SCC. Report completion of 

action with a dual Inventory Adjustment Transaction using the same transaction reference

document number originally used to record the materiel in SCC L (i.e., the transaction 

reference document number of the original receipt or inventory adjustment transaction). See 

paragraph C7.2.7. for distribution depot reclassification denial procedures when requested 

reclassification action cannot be done. 

 C7.2.4. Reclassification of SCC K and R Receipts

 C7.2.4.1. Suspension of Materiel. Under Chapter 13 processing procedures, 

storage activities may suspend materiel in SCC K upon receipt for SCC determination. 

Storage activities may also receive materiel identified as SCC R (suspended) from 

reclamation activities that lack the capability to determine the materiel condition. 

 C7.2.4.2. Storage Activity Actions. Storage activities shall reclassify these 

suspended receipts to their correct condition within the timeframes prescribed in the following 

subparagraphs. When materiel has been reclassified to its correct condition, send a dual 

Inventory Adjustment Transaction for SCC change (DS 947I with QSAR Code AC 

(Condition Change) or MILSTRAP DI Code DAC) to the owner using the same transaction 

reference document number cited in the original receipt transaction. 

 C7.2.4.2.1. Reclassification Timeframe for SCC K (Suspended 

(Returns)). With the exception of ammunition, reclassify materiel reported in SCC K within 

10 calendar days after reporting the receipt; reclassify ammunition within 45 calendar days 

after reporting the receipt. 
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Enclosure 2 

 C7.2.4.2.2. Reclassification Timeframe for SCC R (Suspended 

(Reclaimed Items, Awaiting Condition Determination)). When materiel identified as SCC 

R is received from reclamation activities, reclassify the materiel within 180 calendar days 

after reporting the receipt or prior to induction into maintenance facilities for 

repair/modification, whichever is sooner. 

 C7.2.4.2.2.1. No Asset Test Capability. When the capability to 

test/check SCC R assets for actual SCC does not exist, the materiel may be forwarded to a 

maintenance facility for condition determination. 

 C7.2.4.2.2.2. Property Accountability Records. The actual SCC of the 

assets must be recorded on the owner record before the assets may be included in a 

scheduled maintenance program. 

 C7.2.5. Automatic Disposal of Reclassified Stock. When materiel is reclassified to SCC 

H, storage activities may also, based on criteria promulgated by the DoD Components, 

automatically turn condemned and expired shelf-life materiel into DRMS or take other 

authorized automatic disposal action. Tell the owner of such simultaneous reclassification 

and automatic disposal action by entering Management Code M (materiel condemned--

excludes expired shelf-life materiel) or Management Code T (materiel condemned--expired 

shelf-life materiel) in the dual Inventory Adjustment Transaction. 

C7.2.6. Exceptions to Prescribed Timeframes for Condition Reclassification – Request 

for Reclassification Extension

 C7.2.5.1. Requesting Extensions to Suspenses. When additional time is needed 

to reclassify materiel held in SCC J, K, or R, because of large quantities, lack of facilities, 

nonavailability of personnel and/or test equipment, or other circumstances considered 

justified by the storage activity commander, the storage activity shall forward a DS 846A 

Asset Reclassification Extension Request to the owner. 

 C7.2.5.1.1. Approval of Extension Requests. When appropriate, the owner 

shall use the Asset Reclassification Extension Response to approve the extension 

request, notify the storage activity, and establish a suspense to ensure that classification 

action is taken within the agreed upon timeframe. 

 C7.2.5.1.2. Disapproval of Extension Requests. If the owner does not 

approve the request for extension, they will send an Asset Reclassification Extension 

Response to the storage activity disapproving the request. The storage activity shall 

make every effort to comply with the established timeframe. 

 C7.2.5.2. Reclassification. Owners may submit Asset Reclassification Request 

Transactions in accordance with paragraph C7.2.7. to request hastened reclassification of SCC 

J, K, and R assets whenever it is deemed necessary based on their stock position and overall 

management responsibility. 

C7.2.6. Monitoring Assets Recorded in Suspended SCCs

 C7.2.6.1. SCC J, K, and R. Owners shall review records for all materiel suspended in 

SCC J, K, and R at least monthly and ensure that storage activities do reclassification actions 

within prescribed timeframes. 
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 C7.2.6.2. SCC L. Although there is no prescribed timeframe for transferring 

suspended materiel from SCC L, owners shall review all records for materiel suspended in SCC L 

at least quarterly and will take necessary action to ensure expeditious litigation/ negotiation with 

contractors or common carriers. 

 C7.2.6.3. SCC Q. Although there is no prescribed timeframe for transferring 

suspended materiel from SCC Q, supply sources shall review all records for materiel suspended 

in SCC Q at least monthly. Supply sources will take necessary action to ensure expeditious 

inspection or technical/engineering analysis of suspect assets and prompt transfer of assets, 

under paragraph C7.2.2., based on the inspection results. 

C7.2.7. Asset Reclassification Request, Follow-up, and Response Associated with 

Request for SCC Reclassification 

 C7.2.7.1. Asset Reclassification Request, Follow-up and Denial Transaction

Procedures. This section prescribes standard procedures for use of DS 846A for Asset 

Reclassification Request, Follow-up and Denial transactions. Procedures for using for Asset 

Reclassification Extension Request and Asset Reclassification Extension Response transactions 

are addressed in paragraph C7.2.5. 

 C7.2.7.2. Owner Responsibilities. As discussed in paragraph C7.2.6, owners are 

responsible for monitoring assets in suspended SCCs. Owners use the Asset Reclassification 

Request Transaction to request that the storage activity/distribution depot effects reclassification 

of assets in suspended SCCs. Reasons for sending an 846A Asset Reclassification 

Request Transaction to the storage activity for SCC reclassification are: 

 C7.2.7.2.1. Expedite SCC Reclassification. Owner/manager requirement for 

storage activity to expedite SCC reclassification action. Only the current SCC is identified 

in the transaction. (Identified by 1/BIA06/20 Action Code 23.) 

 C7.2.7.2.2. Resolution of SCC Suspension. Owner/manager resolution of a 

suspension (e.g., completion of litigation or technical inspection). Both the ‘from’ and ‘to’ 

SCCs are identified in the transaction. (Identified by 1/BIA06/20 Action Code 62). 

 C7.2.7.2.3. SCC Reclassification Timeframe Expired. Owner/manager uses 

when the storage activity is responsible for the SCC reclassification action, the timeframe 

has expired, and the owner/manager did not receive a corresponding adjustment, 

reclassification denial, or request for an extension transaction from the storage activity. 

Only the current SCC is identified in the transaction. (Identified by 1/BIA06/20 Action 

Code 86.) 

 C7.2.7.3. Distribution Depot/Storage Activity Actions. In response to an Asset 

Reclassification Request Transaction, the storage activity shall take action to reclassify the materiel in 

the timeframe specified and provide an Inventory Adjustment Transaction to the owner. If the 

distribution depot is not able to effect the reclassification action, the depot will submit an Asset 

Reclassification Denial Transaction citing the appropriate management Asset Reclassification 

Denial Code to explain the reason for the denial1. If the reclassification action cannot be 

accomplished in the timeframe specified, the depot will submit an Asset Reclassification Extension 

Request Transaction in accordance with paragraph C7.2.5.

 

1 STAFFING NOTE: Codes were to be developed for use with the 846A Asset Reclassification Response 

transaction when the storage activity could not accomplish the requested SCC reclassification action. However to 

date, no reasons for an Asset Reclassification Denial have been identified to DLMSO. 
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Enclosure 2 

 C7.2.7.4. Owner Use Asset Reclassification Inquiry Follow-up. Owners send the 

Asset Reclassification Follow-up Transaction to the depot to obtain status of a previously 

submitted Asset Reclassification Request when the owner did not receive a corresponding 

Inventory Adjustment Transaction or Asset Reclassification Denial Transaction. In response 

to a follow-up, when the corresponding inventory adjustment transaction was previously 

provided, the depot will resubmit the inventory adjustment transaction with Advice Code 3P 

indicating it is a duplicate of a previously submitted transaction sent in response to 

the follow-up. Caution must be used by recipient to assure the transaction is not 

processed twice.

C7.3. OWNERSHIP GAINS AND LOSSES

C7.3.1. Change of Ownership. Based on unique requirements of the SMCA and the 

DoD Components, authorized by DoD Directive 5160.65, separate inventory adjustment 

transactions have been developed to permit: 

 C7.3.1.1. Keeping integrity of the document number from the requisitioner's 

original demand throughout total processing, when payback actions are necessary. 

 C7.3.1.2. On-line recording and reconciliation of materiel debit and credit balances 

of the SMCA and affected DoD Components. 

 C7.3.1.3. The DoD Components to have an audit trail when their 

accountable/financial records are affected. 

 C7.3.2. Payback of SMCA Items. The 947I Inventory Adjustment Transaction is used 

to accomplish paybacks of SMCA items from one owning DoD Component to another DoD 

Component, in accordance with DoD policy and inter-DoD Component agreements. The 

SMCA initiates Inventory Adjustment Transactions for processing internal adjustments to 

custodial/accountable records and for notification of SMCA storage activities. The use of the 

M modifier, to express thousands when the quantity exceeds 99,999, is an optional feature 

that can be applied intra-DoD Component and, by agreement, inter-DoD Component. M 

modifiers are only applicable to ammunition items in FSG 13. 

C7.4. PURPOSE TRANSFERS. Based on authorized programs, materiel may be reserved 

for specific purposes and kept on inventory control records until requisitioned. To accomplish 

transfer of assets between purpose codes, the single Inventory Adjustment Transactions for 

purpose code, or dual Inventory Adjustment Transactions for purpose code, shall be 

processed against the inventory control records. DS 947I with QSAR Code AD, or 

MILSTRAP D8D, D9D, DAD apply.

C7.5. INVENTORY GAINS AND LOSSES. Procedures concerned with adjustments due to 

physical inventory losses or gains are contained in Chapter 6. 

C7.6. REIDENTIFICATION OF STOCK, STOCK NUMBER CHANGES, AND UNIT OF 

ISSUE CHANGES

 C7.6.1. Reidentification of Stock

 C7.7.1.1. When inspection shows an item in stock has been misidentified, storage 
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Enclosure 2 

activities shall send two or more Inventory Adjustment Transactions to the owner. The first 

transaction shall contain the misidentified stock number, the quantity misidentified. This will 

be a single inventory adjustment loss transaction (947I with QSAR Code AE 

(Reidentification)) or MILSTRAP DI Code D9J), with Suffix Code A. 

 C7.6.1.2. When one new stock number is picked up due to reidentification, the 

second Inventory Adjustment Transaction shall contain the same document number as the 

first transaction, the identified stock number, and the quantity of the identified stock number. 

This will be a single inventory adjustment gain transaction (947I with QSAR Code AE 

(Reidentification)) or MILSTRAP DI Code D8J), with Suffix Code B. 

 C7.6.1.3. When more than one new stock number is picked up due to 

reidentification, an additional single inventory adjustment gain transaction (947I with QSAR 

Code AE (Reidentification)) or MILSTRAP DI Code D8J) for each newly identified stock 

number shall be prepared and sent. The additional inventory adjustment transaction(s) shall 

be prepared in the same manner as the second transaction except that the suffix codes will 

progress to C, D, etc., as each transaction is prepared. The suffix codes in the second and 

ensuing transactions will serve to correlate the transactions to the misidentified stock 

number. 

 C7.6.1.4. The owner/manager and storage activity shall process the Inventory 

Adjustment Transactions against their inventory control records to cause the decrease under 

the incorrectly identified stock number and increase(s) against the correct stock number(s). 

 C7.6.2. Stock Number and/or Unit of Issue Changes 

 C7.6.2.1. Stock Number Change Only. When only a stock number change occurs, 

the owner/manager and storage activity prepares and processes the Inventory Adjustment 

Transaction containing the old and new stock numbers (Quantity or Status Adjustment 

Reason Code AF (Stock Number Change)) and the associated inventory adjustment increase 

and decrease 

 C7.6.2.2. Unit of Issue Change Only. When only a unit of issue change occurs, 

the owner/manager and storage activity prepares and processes the Inventory Adjustment 

Transaction containing the old and new units of issue (Quantity or Status Adjustment Reason 

Code AN (Unit of Issue Change)) and the associated inventory adjustment increase and 

decrease. 

 C7.6.2.3. Simultaneous Change. When a simultaneous stock number and unit of 

issue change occurs, the owner/manager prepares and processes the Inventory Adjustment 

Transaction containing the old and new stock numbers and units of issue (Quantity or Status 

Adjustment Reason Code AF and AN), and the associated inventory adjustment increase 

and decrease. 

C7.7. CONDITION CHANGES FOR ITEMS BEING REPORTED/TURNED IN TO DRMS

 C7.7.1. Materiel Turn-In. When materiel is not identified by an NSN and is actually 

scrap, the DoD Components may prescribe that it be classified in SCC S for turn in to 

DRMOs. Otherwise, only materiel recorded on property accountability records in SCC A 

through H and SCC Q shall be reported or turned in to the DRMO. 
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Enclosure 2 

 C7.7.2. Excess Materiel. When excess, serviceable, or unserviceable materiel is 

classified in SCC J, K, L, M, N, P, or R, the DoD Components must initiate action to reclassify 

the materiel to an acceptable SCC (A through H, Q, or S) before preparing the turn-in 

documentation. Section C7.2 contains the Asset Reclassification procedures. 

 C7.7.3. Improper SCC. Activities not reporting or turning in materiel to DRMOs in an 

appropriate SCC shall risk having the materiel rejected/returned by the DRMO for proper 

classification. 

 C7.7.4. DRMO Actions. DRMOs shall use the disposal condition codes to accurately 

describe the physical condition of the materiel based on its inspection at time of receipt. 

DRMOs shall record both the SCC and the disposal condition codes, and will show both 

codes as management data for reutilization program screening and review. Within the 

DRMO process, Disposal Condition Code S is assigned for "property with no value except for 

its basic materiel content." Consequently, Disposal Condition Code S may be assigned by 

DRMOs to materiel with or without NSN identification. 

C7.8. MAINTAINING ACCOUNTABILITY DURING MAINTENANCE